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Edited Transcript of YRCW earnings conference call or presentation 8-May-19 1:30pm GMT

Q1 2019 YRC Worldwide Inc Earnings Call

OVERLAND PARK May 14, 2019 (Thomson StreetEvents) -- Edited Transcript of YRC Worldwide Inc earnings conference call or presentation Wednesday, May 8, 2019 at 1:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Brianne L. Simoneau

YRC Worldwide Inc. - VP & Controller

* Darren D. Hawkins

YRC Worldwide Inc. - CEO & Director

* Stephanie D. Fisher

YRC Worldwide Inc. - CFO

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Conference Call Participants

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* Brad Delco

Stephens Inc., Research Division - MD

* Jeffrey Asher Kauffman

Loop Capital Markets LLC, Research Division - MD

* Scott H. Group

Wolfe Research, LLC - MD & Senior Transportation Analyst

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Presentation

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Operator [1]

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Good day, and welcome to the YRC Worldwide First Quarter 2019 Earnings Conference Call. (Operator Instructions) Please note, this event is being recorded.

I would now like to turn the conference call over to Ms. Bri Simoneau, Vice President, Controller. Ms. Simoneau, the floor is yours, ma'am.

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Brianne L. Simoneau, YRC Worldwide Inc. - VP & Controller [2]

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Thank you, operator, and good morning, everyone. Welcome to YRC Worldwide's first quarter 2019 earnings conference call. Joining us on the call today are Darren Hawkins, Chief Executive Officer of YRC Worldwide; Stephanie Fisher, Chief Financial Officer of YRC Worldwide; and T.J. O'Connor, President of YRC Freight.

During this call, we may make some forward-looking statements within the meaning of federal securities laws. These forward-looking statements and all other statements that might be made on this call, which are not historical facts, are subject to uncertainty and a number of risks, and thus, actual results may differ materially. The format of this call does not allow us to fully discuss all of these risk factors. For a full discussion of the risk factors that could cause the results to differ, please refer to this morning's earnings release and our most recent SEC filings, including our forms 10-K and 10-Q. These items are available on our website at yrcw.com.

Additionally, please see today's release for a reconciliation of net loss to adjusted EBITDA on a consolidated basis and operating loss to adjusted EBITDA on a segment basis. During this call, we may refer to our non-GAAP measure of adjusted EBITDA simply as EBITDA.

In conjunction with today's earnings release, we issued a presentation, which will be referenced during the call. The presentation was filed in an 8-K along with the earnings release and is available on our website.

The format of this morning's call includes the first quarter overview of our financial results. Darren will then present an overview of the recently approved National Master Freight Agreement.

I'll now turn the call over to Darren.

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Darren D. Hawkins, YRC Worldwide Inc. - CEO & Director [3]

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Thank you, Bri, and good morning, everyone. I am pleased to announce that on May 3, 2019, our employees voted to approve the National Master Freight Agreement and all but one of the 27 supplemental agreements. The primary objective for YRCW in Q1 was to achieve a new labor contract that is good for employees, customers and shareholders. I believe the 5-year contract that was just approved meets all of these objectives. It puts us in a more competitive hiring position while providing a more market-competitive wage to our current employees, more operational flexibility to benefit customers, and we expect better shareholder return. We believe this contract, along with network optimization, will provide the foundation for YRCW to achieve meaningful and sustainable growth and operating improvements over the next 5 years.

Before I share more about this, I will turn the call over to Stephanie to provide an overview of our first quarter results.

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Stephanie D. Fisher, YRC Worldwide Inc. - CFO [4]

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Thank you, Darren, and good morning, everyone. For the first quarter 2019, YRC Worldwide reported consolidated revenue of $1.18 billion, which is down from $1.21 billion in the first quarter 2018. Operating loss for the first quarter was $31.7 million compared to an operating loss of $4.3 million in the first quarter 2018.

Additionally, the company reported adjusted EBITDA of $30.1 million for the first quarter 2019 compared to $45.7 million for first quarter 2018. For the trailing 12 months, adjusted EBITDA was $321.9 million compared to $276.7 million in 2018, an increase of $45.2 million.

While we're disappointed in the results for the quarter, performance was clearly impacted by 2 factors. First, our quarterly results reflect customer disruption from the uncertainty caused by the labor negotiations. We were very proactive and transparent with our customers during the negotiations. However, we do believe our customers were holding back current and/or new business until our contract was approved. Second, weather. Approximately 50% of the 63-day quarter was impacted by weather events for both YRC Freight and Holland, resulting in limited or closed operations across our 384-facility network. Holland's network was impacted especially hard during a 2-week period in late January and early February in which more than 25% of their network was down.

Turning to the stats. I want to first discuss the change in our operating metrics. With the enhanced focus of service and product expansion of the launch of HNRY Logistics in late 2018, our increase in shipments over 10,000 pounds is growing, impacting the year-over-year revenue per hundredweight metrics for YRC Freight, which includes the results of operations for HNRY Logistics. Therefore, the company has updated its presentation of operating metrics to separately present less-than-truckload operating stats, which represent shipments less than 10,000 pounds.

Starting with YRC Freight. The first quarter 2019 year-over-year LTL tonnage per day was down 5.8%. Additionally, year-over-year LTL revenue per hundredweight including fuel surcharge was up 5.4%, and LTL revenue per hundredweight excluding fuel surcharge was up 5.8%. Finally, year-over-year LTL revenue per shipment including fuel surcharge was up 3.6% and up 3.9% when excluding fuel surcharge.

Moving to the Regional segment. The first quarter 2019 year-over-year LTL tonnage per day was down 7.5%. Additionally, year-over-year LTL revenue per hundredweight including fuel surcharge was up 3.8%, and LTL revenue per hundredweight excluding fuel surcharge was up 4.2%. Finally, year-over-year LTL revenue per shipment including fuel surcharge was up 3.7% and up 4.1% when excluding fuel surcharge.

Our first quarter customer contract renewals have averaged 6.7% for YRC Freight and 5.4% for the Regional segment, which are positive indicators as we move into the second quarter 2019.

For further reference, the earnings release and presentation issued this morning include full segment financial information and statistics.

Turning to liquidity. Our cash and cash equivalents and Managed Accessibility under the ABL facility at March 31, 2019, was approximately $156 million, which is a decrease of approximately $48 million compared to December 31, 2018. As a reminder, we generally experience our seasonal low point in liquidity in Q1 due to the cyclical nature of our business.

This brings me to our credit facility covenant update as of March 31, 2019. Our funded debt-to-adjusted EBITDA ratio was 2.76x compared to a maximum credit facility covenant of 3.25x. The covenant maximum remains at 3.25x through the next 2 quarters and steps down to 3x by the end of 2019.

Improving the age of our fleet remains a top priority for our company. Our journey to upgrade our revenue equipment started in 2015, and since then, we have progressively invested in our fleet. We've upgraded more than 4,600 tractors or nearly 33% of the tractor fleet and more than 11,000 trailers or 25% of the trailer fleet.

In 2019, we expect our investment in capital expenditures, including technology, to be at a rate of approximately 6% to 7% of consolidated operating revenues, which would result in 40% of our tractor fleet and 29% of our trailer fleet being upgraded.

Finally, as we think about the rest of 2019, the economic outlook remains moderately optimistic with GDP at 2.3%, albeit slower than 2018's growth. Still, driver shortages, healthy consumer spending and growing U.S. industrial production sector will provide growth opportunities. Additionally, we believe the pricing environment remains favorable and is consistent with what we were seeing in our most recent contract renewals.

Having said all that, our full year 2019 results will be burdened with the upfront labor and benefit costs in the new labor agreement with no benefit from the operational capabilities until the contract is fully ratified. Additionally, with the restoration of an additional 1 week of vacation for employees that satisfied eligibility criteria in 2018, the company will reflect a onetime charge in its operating results of approximately $10 million to $15 million in Q2 2019.

I'll now turn the call over to Darren to discuss labor, growth and network optimization.

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Darren D. Hawkins, YRC Worldwide Inc. - CEO & Director [5]

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Thank you, Stephanie. As I said earlier, it's great to have a new 5-year national labor contract and all but one supplement complete after a significant negotiations process as it's been over 10 years since we did the last full contract. The agreement provides us with the critical components to fully execute our strategic road map, which will be positive for employees, customers and shareholders.

With winter weather and customer contract concerns in the rearview mirror, we have immediately turned our attention back to implementing a strategic plan that takes advantage of the meaningful opportunities provided in the contract. This includes focusing on the key areas of costs and benefits of the labor agreement, customer growth and network efficiencies.

First, let's start with the economic package. The driver shortage is a real issue in our industry, and we have tackled it through a comprehensive recruiting program built over the last 5 years. We know what it takes to hire drivers and believe our new wage and benefit package provide the foundation for driver hiring and driver retention. As we move on to wages, we are proud this agreement represents significant wage improvements as it allows us to advance our driver hiring and retention efforts, which are critical to keeping our network operating efficiently and delivering value to our customers.

Concerning benefits, we successfully obtained a capped rate structure as part of our new labor contract. While employees will continue to receive top-notch health care from the same funds they participate in today, the contract provides predictable, modest cost increases that are less than the increases included in the previous agreement. The new negotiated annual rate increases are, on average, approximately $0.30 per hour lower than the rate increase we took for health, welfare and pension during 2018. This new rate structure for benefits will partially offset the wage increases under the new contract.

To that point, wage and benefit increases from our previous contract were approximately 2% to 3% of revenue on an annual basis. We expect the new wage and benefit increases from our new contract to be approximately 3% to 4% of revenue on average on an annual basis, which we believe our yield growth will offset the remainder, just as we've done in recent years. To expand revenue, our 2019 and 2020 initiatives are centered around customer growth and network efficiencies.

Starting with customer growth, in March, we introduced a new structure for our corporate and 3PL sales force, making it possible for them to provide solutions across all 5 of our operating companies. These 2 sales channels represent nearly 70% of our overall revenue base. Customers now have a single point of contact to access 4 distinct asset-based carriers and one non-asset brokerage, all from one point of contact. This is a true competitive advantage, and we already have several instances of increased business from current customers in the short time the structure has been in place by introducing them to additional YRCW companies.

Additionally, the launch of HNRY Logistics in late 2018 is gaining traction and providing customers with non-LTL modes such as truckload, intermodal and expedited services. Additionally, the brokerage provides complex supply chain solutions we know customers are looking for such as residential delivery, contract logistics, warehousing and engineered solutions.

Building improved engagement channels and expanding services are part of our go-to-market strategy. Our core focus is on improving the overall experience for the customers we currently serve and increasing the number of opcos they do business with while also attracting new customers through newly developed channels.

Finally, this brings me to terminal and network operations. YRCW moves 20 million shipments annually through 384 terminals. The linehaul optimization models that I've been referencing publicly for several quarters are mature and now in place at all operating companies. Having the opportunity to look at the network with a common view as opposed to 4 different views allows us to build a better, more efficient network that we expect to deliver improved service to our customers, greater job stability for our employees and cost reductions.

The new labor contract provides key components to being able to launch operational improvements that we expect to deliver $60 million to $80 million in network efficiencies and cost reductions in 2020. Individually, the operational benefits in the contract are an important part of this effort while also contributing to overall productivities, efficiencies and most importantly, improved service for our customers. Combined, they allow us to enhance our operating model, provide capacity when needed and more consistently deliver cost-effective and high-performing service.

These benefits include: first, an expanded box truck program. This flexibility allows a new classification of employees that do not possess CDL licenses to drive box trucks in our city operations. This will allow us to replace costly third-party cartage carriers, reduce destination terminal inventory and improve on-time service, all while developing a pool of future CDL drivers.

Second, more fluid and efficient work rules for terminal dock and yard operations, along with additional lower costs, full-time dock and part-time job classifications. We know the key to employee retention is an attractive and transparent career path. New job entrants are looking for a career path. We can hire employees then as part-time dockworker, advance them into full-time non-CDL dockworker or drivers, and then through our internal driving schools, develop them into a certified CDL driver. These significant changes should materially reduce the amount of costly overtime and expensive delay pay while also improving processing time.

Lastly, the new contract gives us the increased ability to use purchased transportation for additional capacity and cost savings. At YRC Freight, the new contract increases the maximum amount of purchased transportation available for use to 29%, gives us more flexibility to shift between placing freight on rail and road carriers as needed.

At Holland, we are introducing road purchased transportation for the first time at a total of 8%. Purchased transportation provides us cost savings versus our internal costs while also providing expansion capacity. In addition, purchased transportation opens up the opportunity for growth while preserving capital, reducing liability and improving our overall service.

Finally, a key component to our 2019 and 2020 strategy to improve profitability through network efficiencies is our network optimization plan. As I mentioned earlier, we have optimization visibility across all 4 carriers. And late last fall, we appointed Scott Ware to a newly created position of Chief Network Officer. In this role, Scott is leading the new holistic view of our network and has been executing on ways we can create efficiencies across all of our companies. Scott also continues to serve as the President of Holland. He's been in the industry more than 30 years and has earned a solid reputation as a smart, creative operator, a strong leader and has extensive network experience across all of our companies.

In our initial assessment, the network optimization team identified 15 to 20 terminals for cohabitation over the coming months. Approximately half of the identified terminals are under lease and should provide us cost reductions. The remaining terminals have a current market value of approximately $20 million to $25 million, which will provide additional liquidity for technology and equipment investments. We are just scratching the surface on this initiative and believe there is a lot more ahead.

We accomplished what we set out to do by obtaining approval for a national labor agreement that is good for our employees, our customers and our shareholders. I feel confident that our strategic road map is setting YRCW up for success in the years ahead. As always, I would like to thank all members of the YRC Worldwide team for their continued efforts to meet our customers' needs and expectations each and every day.

Thanks for your time this morning. We would now be happy to answer any questions that you may have.

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Questions and Answers

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Operator [1]

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(Operator Instructions) The first question we have will come from Brad Delco of Stephens.

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Brad Delco, Stephens Inc., Research Division - MD [2]

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It looks like the weather impact to Regional is pretty severe. And in the past, I think it's taken a little bit of time for you guys to recover from disruptions, maybe like we saw in Q1. Is there any way you can give us a sense of -- has anything changed? Do you think you can recover quickly from just sort of an operating perspective and a margin perspective in Q2? So any color you can provide would be helpful on that topic.

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Darren D. Hawkins, YRC Worldwide Inc. - CEO & Director [3]

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Brad, I'll start and then let Stephanie jump in. Certainly, from an operating perspective, recover quickly. As we stated in our comments, Holland was the primary carrier of our group that was impacted through that process and just a really tough situation from a weather standpoint, but their operations are solid. They recovered quickly, service is good and efficiently as well. As far as Q2 goes, certainly some headwinds from accruing for the new economic package starting April 1 and is not in place yet until the final supplement is approved and then the contract is ratified, and we can start on these operational improvements that I mentioned in the comments. And Stephanie, anything to add to that?

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Stephanie D. Fisher, YRC Worldwide Inc. - CFO [4]

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I think the only other thing that I would add is as we think about New Penn and the New England motor freight business that we brought on in first quarter, that took a bit of time to bring on and to staff up for that as well. So that caused some additional costs that we incurred in Q1 as well as it relates to the Regionals.

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Brad Delco, Stephens Inc., Research Division - MD [5]

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Okay. That's helpful. And then maybe on the $60 million to $80 million of savings or efficiencies to gain next year, why couldn't we see that sooner? Is there something structural that is preventing you from trying to realize that this year?

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Darren D. Hawkins, YRC Worldwide Inc. - CEO & Director [6]

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Brad, on the network optimization front, those 15 to 20 terminals, that's going on right now. So that will be implemented and executed, and as I said, just scratching the surface of that piece. Certainly, some of those cost savings will come into play in 2019. A lot of these operational opportunities, depending upon the date of ratification, will have to be stood up. Although we're making the plans and we're preparing for all of those pieces, there will be a short ramp-up period to that. So Q3, we could start seeing some of the benefit from that. But as of now, I'm not knowing the exact date of ratification, that's why we put more toward '20.

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Brad Delco, Stephens Inc., Research Division - MD [7]

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Okay. And then 2 quick ones, if you don't mind, for Stephanie. The charge you're taking, I think, for vacation accrual in Q2, will that be excluded from adjusted EBITDA?

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Stephanie D. Fisher, YRC Worldwide Inc. - CFO [8]

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So it will over time. So the way we think about that is what would have been in the trailing 12-month EBITDA for the time period. So this is a charge for vacation that would have been accrued in 2018. It was earned in 2018, taken in 2019. That's the distinction there. So because it was earned in 2018, we'll have to spread the add-back back over the next 3 quarters because part of that would have been included in the 2018 portion of the EBITDA that's in the trailing 12 months. Does that make sense?

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Brad Delco, Stephens Inc., Research Division - MD [9]

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Yes. And then the sale of these 15 to 20 terminals that could generate $20 million to $25 million, if they are gains, that would be included in your adjusted EBITDA. Is that correct?

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Stephanie D. Fisher, YRC Worldwide Inc. - CFO [10]

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That is not correct. So if you recall, Harrisburg was a specific property where we've continued to have operations there. We do still have one remaining property that is similar to Harrisburg. But of the other properties that are in that $20 million to $25 million, most of those properties are actually properties that we would no longer have operations in, and so those will be excluded from adjusted EBITDA.

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Brad Delco, Stephens Inc., Research Division - MD [11]

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Okay. That makes sense. And then last one, and I apologize if I missed this. Could you give us monthly tonnage for Freight and Regional and an update on April, if you can?

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Stephanie D. Fisher, YRC Worldwide Inc. - CFO [12]

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Yes, sure. And you did not miss that. I didn't give it as part of my opening comments, but I do have those here for you. So for YRC Freight, January tonnage was down 5.6%. And this is LTL tonnage as consistent with my comments earlier. YRC Freight January tonnage, down 5.6%; February, down 5%; March, down 6.5%; and April, down 5.5%. For the Regionals, January, down 3.8%; February, down 9.9%; March, 8.3%; and April, 5.3%.

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Operator [13]

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The next question we have will come from Scott Group with Wolfe Research.

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Scott H. Group, Wolfe Research, LLC - MD & Senior Transportation Analyst [14]

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So I wanted to ask you about that monthly tonnage because for everybody else that's reported, I think, so far, April's been worse than sort of March, and you guys are getting a little bit better. So what do you think is driving that? I know there's some concern in the industry about pricing environment getting a little bit more competitive. Or are you guys maybe going a little bit after some tonnage right now? Maybe some thoughts?

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Darren D. Hawkins, YRC Worldwide Inc. - CEO & Director [15]

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Scott, good question. We put out our tentative agreement on March 21, and certainly, we saw customer [noas] around that contract process. So we certainly see part of us improving even though we're still in a decline position there, but the improvement in April, I think, comes from having a tentative agreement in place. Certainly, with Easter falling later than normal in recent years, we haven't seen that uptick that we're looking for going into the summer months. But from our individual perspective, our contract renewals are still running in the 5% to 6%. We feel really good about the yield numbers. And I think from a national aspect, our yield is comparable to some of the other national carriers and even better than a few. So I'm confident in our pricing measures. Also I will remind everyone, we're fully deployed on dimensioners. We've got a very good view of what's moving through our networks. And I credit that to us being able to maintain the solid 5% to 6% contract renewals, which is also winding up much closer to our yield numbers.

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Scott H. Group, Wolfe Research, LLC - MD & Senior Transportation Analyst [16]

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But big picture, nothing's changing from your mindset of price over tonnage?

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Darren D. Hawkins, YRC Worldwide Inc. - CEO & Director [17]

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No. That will certainly be our focus. We will prioritize yield.

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Scott H. Group, Wolfe Research, LLC - MD & Senior Transportation Analyst [18]

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Okay. Good. And then I want to ask about the contract. So it sounds like we have all in like an extra point or so of wage inflation each year relative to the prior deal. So give or take another -- an extra $250 million or so of wage inflation over this -- in this contract, how -- I know you gave the $60 million to $80 million of sort of network savings next year, but what do you think the aggregate savings from a productivity standpoint you can get over this next 5 years? How do you think it compares versus that $250 million?

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Stephanie D. Fisher, YRC Worldwide Inc. - CFO [19]

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So Scott, most of the $250 million will be covered by our yield improvements that we've been seeing consistent with what we've been doing to cover the wage and benefit increases that we've seen in the previous contract. We expect the $60 million to $80 million to grow over time. We'll have a more honed in view of that as we roll these out here in the next couple of quarters and probably can speak to that better as we move through time. But we do expect the $60 million to $80 million to grow as we move into 2021 and 2022, especially as we get the network optimization pieces all folded in as well.

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Darren D. Hawkins, YRC Worldwide Inc. - CEO & Director [20]

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I know that in my comments I talked a lot about the career progression and the career path in our company. And a big part of that is having a more competitive wage package allows us to hire appropriately among job classifications. So as an example, for 2018, overtime was 5% of our revenue. So Scott, $250 million annually just in overtime. And also you've got delay pay, we've got that expensive local cartage fees. All of those areas being addressed through the changes to the contract moving forward. So there is -- from our view, there's a large variety of areas that provide us the opportunity to deliver this improvement for shareholders over the upcoming 5 years.

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Operator [21]

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(Operator Instructions) Next, we have Jeff Kauffman of Loop Capital Markets.

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Jeffrey Asher Kauffman, Loop Capital Markets LLC, Research Division - MD [22]

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Quick question. As you move through this network optimization, how much capacity, however you want to measure it in terms of doors or whatever way you look at it, will we be taking out of the network? And where are you on the utilization of that capacity basis?

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Darren D. Hawkins, YRC Worldwide Inc. - CEO & Director [23]

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Yes. Great question, Jeff, and that's exactly how we look at this phase. So I'll start by saying when we say network optimization, you're dead on. What we're talking about is asset utilization, not only with tractors, trailers, but also our properties. Because of the unique situation of our company and us having 384 facilities with multiple properties in the same geography, more efficient asset utilization allows us to make these changes without giving up capacity as -- actually, with our sales changes. And the way we're approaching the market, we're looking for revenue expansion. So just as what we did last year, the benefits of the change to operations that YRC Freight saw, in particular, that we were able to reduce number of facilities but not give up capacity in the process. Now I will say if we saw major changes in the economy, which right now things appear stable and the leading indicators we look at from industrial production and other pieces as Stephanie mentioned in her comments, we would anticipate just driving the asset utilization piece as we scratch the surface of this initiative. But if things were to take a dramatic change and the situation worsened from an economic outlook, then we could certainly accelerate the process and look at it more from an opportunity to create efficiency throughout all of our networks.

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Jeffrey Asher Kauffman, Loop Capital Markets LLC, Research Division - MD [24]

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Okay. And then just one follow-up. You mentioned that you felt there was a little bit more of an effect than you expected in terms of customers holding back, which is not unusual in a labor negotiation year. Did you -- and Stephanie, thank you also for giving the monthly breakout because I think it's easier to see the weather impact on the Regionals there. In terms of these customers, how do we get that business back? Is it just, okay, we have a TA, you're finalizing a deal, you can come back and give us more volume? Or is this a situation where the customers had to take freight elsewhere for a period of time that may take a while?

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Darren D. Hawkins, YRC Worldwide Inc. - CEO & Director [25]

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I'll start by saying based on all the events, it's played out over the last 3 or 4 quarters from a unionized LTL standpoint, we were committed to being very transparent with our customers through this process. And that's exactly what we did. And it was probably to our own detriment from a tonnage aspect, but it was more important for us because these customers have been loyal to this company for decades is the reason we're still here. And we wanted to make sure that they had the opportunity to plan appropriately. Now once the tentative agreement came out, we did start seeing -- the declines started to lessen. With the approval that we just got last week on the national side, even though we still got one supplement outstanding, we're also seeing things firm up. So I think from that perspective, Jeff, we did the right things, but also moving forward, we hope that our customers reward us for that.

The last thing I'll say on this topic is multiple lines of business across our companies is an opportunity that we haven't taken full advantage of in recent history. For instance, when T.J. has a customer using YRC Freight, but they do not utilize Reddaway, the change we made in the sales approach with one corporate account executive representing all companies is just that, that we take existing customers and expand the revenue with those customers by introducing them to other operating companies that can certainly meet their needs and that we've already got relationships with. In the past, we had a salesperson representing the regional companies and one representing the national company. Now that is consolidated, and the opportunities there are promising. I will say the accounts, and it's been less than 10, but they are very, very large accounts where we've had this approach in for a few years, we've seen revenue expansion at all of our companies by focusing on this process. So that's part of what we're doing from a recovery standpoint as we move forward with this new labor agreement.

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Operator [26]

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We're showing no further questions at this time. I will go ahead and conclude our question-and-answer session. I would now like to turn the conference call back over to Mr. Darren Hawkins, Chief Executive Officer, for any closing remarks. Sir?

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Darren D. Hawkins, YRC Worldwide Inc. - CEO & Director [27]

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Thank you, operator, and thanks again to everyone for joining us today. Please contact Bri with any additional questions that you may have. This concludes our call. And operator, I'll turn it back to you.

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Operator [28]

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All right. Thank you, sir. And sir, we thank you for your time and also to the rest of the management team. And again, we thank everyone for joining today's conference call. At this time, you may disconnect your lines. Thank you. Take care, and have a wonderful day.